Friday, January 23, 2026

A Common UBE Trap:

An agent will inform a third party that the agent is acting for the principal, even though the agent has no actual authority to act for the principal. It might seem, then, that the agent has apparent authority to act since it would be reasonable for a third party to think that the agent, apparently, has the right to act. But it's important to remember that apparent authority exists only if the principal holds out the agent as possessing that authority to act. The trap here, used time and again on the UBE, is to treat apparent authority as having been met because of words or conduct by the agent towards a third party.  
The policy here that will help you to remember this distinction is to remember that the principal will be bound by the agent's apparent authority. Because the principal will be burdened, the principal will need to be the cause of that burden. 

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